West Chester, Pennsylvania-based Verrica Pharmaceuticals Inc. (VRCA:NASDAQ) reported solid early launch metrics for its newly approved drug YCANTH to treat molluscum contagiosum (MC), noted HC Wainwright analyst Oren Livnat in a November 20 research report.
The analyst reiterated a Buy rating and US$12 price target on Verrica.
Rapid Doctor and Patient Adoption Seen
According to Livnat, over 3,000 healthcare providers have already been trained on using YCANTH, with 1,300 offices receiving product samples. The company is also seeing faster-than-expected uptake among pediatricians.
The drug achieved formulary access at several key hospitals, and reimbursement coverage has expanded to over 100 million lives, providing a strong foundation for growth.
Upcoming Catalysts for Upside
The analyst expects accelerating adoption as YCANTH receives its permanent reimbursement code in January. Additional 2023 catalysts include clearing unauthorized competing products from the market and advancing the pipeline.
Verrica's cash balance of US$84 million provides funding into early 2025.
Significant Upside from US$300M Peak Sales Potential
HC Wainwright's US$12 price target on Verrica implies over 240% upside for the shares, based on the firm's peak sales forecast of US$300 million for YCANTH in MC alone.
Additional pipeline assets like VP-102 for other skin conditions could provide further upside.
In summary, the rapid doctor and patient adoption in the early launch combined with a robust coverage and reimbursement landscape position Verrica for significant appreciation, in the analyst's view.
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- This article does not constitute medical advice. Officers, employees and contributors to Streetwise Reports are not licensed medical professionals. Readers should always contact their healthcare professionals for medical advice.
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Disclosures for H.C. Wainwright & Co., Verrica Pharmaceuticals Inc., November 20, 2023
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I, Oren Livnat, CFA , certify that 1) all of the views expressed in this report accurately reflect my personal views about any and all subject securities or issuers discussed; and 2) no part of my compensation was, is, or will be directly or indirectly related to the specific recommendation or views expressed in this research report; and 3) neither myself nor any members of my household is an officer, director or advisory board member of these companies.
None of the research analysts or the research analyst’s household has a financial interest in the securities of Verrica Pharmaceuticals, Inc. (including, without limitation, any option, right, warrant, future, long or short position). As of October 31, 2023 neither the Firm nor its affiliates beneficially own 1% or more of any class of common equity securities of Verrica Pharmaceuticals, Inc..
Neither the research analyst nor the Firm knows or has reason to know of any other material conflict of interest at the time of publication of this research report.
The research analyst principally responsible for preparation of the report does not receive compensation that is based upon any specific investment banking services or transaction but is compensated based on factors including total revenue and profitability of the Firm, a substantial portion of which is derived from investment banking services.
The firm or its affiliates received compensation from Verrica Pharmaceuticals, Inc. for non-investment banking services in the previous 12 months.
The Firm or its affiliates did not receive compensation from Verrica Pharmaceuticals, Inc. for investment banking services within twelve months before, but will seek compensation from the companies mentioned in this report for investment banking services within three months following publication of the research report.
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